[Unit 1] Introduction BLOCKCHAINS Overview of Blocshan, Public Ledgers, Bitcoin, Smart Cont, Block ARCHITECTURE, DESIGN AND USE CASES {n't Blocchain, Transactions, Distbuted Consensus, Public vs. Private a Biockhain, Unieraardng Cryprcurency o Blockchain, Pemissoned poe emcee mac Model of Blockeain, versie’ of Secriyaspees of leskehain, Base com an = Cyto Prinives: Hash fonctions, Properties of a hash function, Hash pier and Merkle ee, Public key erypowraphy, Digital signatures, Zor0- se sin ce a sched Inowledge systems Preemie rere + Atistory of blockchain —how the computation enanment gradually + Adecentalized computation and information sharing platform that valved ‘enables multiple authoritative damains, who do not trust eachother, to + Blockchain ~ archtechure, design and protocol cooperate, coordinate and collaborate ina rational decision making + Blockchain consensus protocols process + Security and Privacy aspects of Blockchain + Various use cases ~ Finance, Supply Chain, Government + Hyperledger Fabric ~ a platform for Biockchain development + Research aspectsTecra eee cual incr ac eee ical + Traditional way of sharing documents + Shared Google doc—both the users can edit simutaneously aw 3, The environment is still centralized, “Does centralized system harm? enon cu rok erie eae) + Asingle point of failure If you do not have sufcient bandwidth to load Google doc, youll not be abe to ait — What if the serve crashes? Complete reliance on single ont centrale) snot Sate + Decentralized: Multiple points of corsination + istrbuted: Everyone Collectively execute the job ‘mage courtesy: hito/inkaloececa re Everyone edits on their local copy of the document — the Internet takes care of ensuring consistency & eect cl ~ re mers abe oy the seb aos = oe ‘© ere fa e — The local copies are always updated ae ze ee etait rem al Blockchain ‘A decentralized database with strong consistency support eke cl + Wecal isa Pubic Ledger ~ Aaaiabes of strc iiomtor aise eveyone EB gy ~ The historical infomation” maybe blz fro coputton + An Example: Soy fe sor omaton ae be B® lay Cerio = The old transactions are used to ze OF validate the new tansactons‘An Example of Public Ledger from Banking Sectors ete aul au ocd nA 8 —_ nr) j—— i aa ice ms ‘ce rae rr sO { : aN te rr sO : (Cais 4005) rns cer Jane Jane eee ae anaes eee ae anaes ke ggr AS 10,| (Tae | Peter—pc.ngr | ARSEID|| (cao rei eter i ah > ‘ae ave asc ee Bob ‘ce > obs 22% te ‘80 ice pe of i flee: 200 ‘lie8400_| Pubic edger flee: 200 A ‘lie8400_| Pubic edger re ote ae =a ime rato eer \ ee om 30 150 30 "50 ve sane wane‘An Example of Public Ledger from Banking Sectors ete aul au ocd -Alc:100_, abe gg Ales 00, | j |i: 100. Pb eer tate Ace > 80 r,t ce Ale > Bo ‘lke->80b; n= 50 bobo: sine To | Alce1400 rs eter |-Ae00 | roc tder asc ee Bob ‘ee > ob: 180 ‘80 0 cob a oe a ‘An Example of Public Ledger from Banking Sectors Blockchains and Public Ledgers -Alc:100_, tet | Ale: a400 | rotted sae Alee-> Bo: ‘ee Bob: 180 50 50 obstve: oo a ube der Alcs 100 (-Aice100 ruc ater yb ede ce > Bob: ‘lice > Bots oie 50 2 Bockchains work ke a subi ledger Homever, we need to ensure a number o diferent aspects = Protocols for Commitment: Ensure thal every val transaction from the ‘lenis are commited and include in the blockchain within afte tm. ~ Consensus: Ensure thatthe local copes are consistent and updated ~ Security: The dala needs tobe famper proof. Not thatthe clients may act malicousi or can be compromised. ~ Privacy and Authenticity: The data (or tansactios) belong o various ‘lenis; privacy and autbenity need to be ensure,Formal Definition of a Blockchain sa + ABlackchain is “an open, distributed ledger tha! can record transactions ‘ , auocscrnit hetween tuo partes ficiently and in a verifiable and permanent way" (lansit, Lakhani 2017) + The keywords: Open ‘accessible to all), Distributed or Decentralized (no ”% Sige pry cont tent (at an sca), vert reyone can A check the ay of iran), permanent (he inoraon is persist) TeCAMOOE ¢ tars ty he ct a A HISTORICAL PERSPECTIVE Pree rmec Cryptographic Hash Functions * Cryptographically Secured Hash Functions + Examples: MDS, SHA256 Le] i ~ Hash Fncos: gary ed tao 2a Se, Ete Hs) =x%e,otee x *-Xib led ho message and S| eer) pert terrae viewers rae ioiscakdtemetge Ea endmare repr an fe mor ems er son yn operons. x canbe any atte long, bt Hi wth be ange digest ELS | cee) — (yplgrephcay Sere + Asralltangeine ia ESSE} aera) + One way, path x we can compute Hix) bu given a h(x), no deterministic elgoithen can ‘esults in a significant change in ‘compute x - a ~ ‘the output - called the zz - area le + Fortwo fret and, fi and Mi) sou be rt aprscare eesCryptographically Secured Chain of Blocks eo ear) + Ago know as hash to * Teta dat ooment SRR om (Harber and Stometta, 1991) free sari ~ Asoo ina: 5518 16eabe | Hote) oo = enolase eer crit Be Seco seria semen ‘orang le somes rumba oocees et. | NENSNRATEND Biel er festamp, ash va fom he previous request end Us croatia | inet | | irnmeispehwocmectetepees | wawiacmay cpesnctanel tty toss ns a nodes oa) 02 3 Ss eso 9 ig nt: ec a Use of Merkle Trees + Bayer, Harber and Stometta used Merkle Tree in 1992 for timestamping and veiying a digital document - improved the aficiency by combining {imestamping of several dacuments into one block LETTE WA) accu LD + Other uses of Metke Tree ~ Perio Per Neto: sta eke canes uncemiges sd una ner peers do note abut tlok ~ Bitcoinipleriaton- share iformaten ae uated ro one cn eabouta ‘rarsacionRe cant Erna cal «+ Bitcoinis @ completely decentralized, peer-to-peer, permissionless ‘The last few years have seen alt of intrest in Btooin and exyptocurencies in general exypoeraey pat foc in 2008 1 Usa ocx. tacate cary whl rt nd conta any ‘Completely decentalized: no canta pat for oréaring or receding anything government and hence fz from regulation Peersopeec sofware thal son machines el aes fm he + Cure TC pics 1 BTC= $5090 (sof 8° Mare, 08a 100 pn) sysen + Taibo sas fuer 2017 spinal 19 3 Pemisinse: oat, no nada Sup anys oo acne conirol~ anyone canpacipae in any ole Slokchain Site il = cin rice “on titan tte 8) eval The oo behind Bitcoin - The Blockchain ected ‘ce opens ter Prowse the ares of Bob and Steamwatht | ‘the ameunt to traser and sends Note: block nay cae contain mitiple if onmaions RasaThe Bitcoin Transaction Life Cycle - The Network Delon On ney aa cas Miers (Once the mining is mae Semowouboed —.ehwetie Micrrngen |, uate Se iene ‘on the existing “transaction to the for the atime > exiting blockchain, Included inthe existing eigen = Stace, <0 weet eee an aa emt = oo | al Aomes raed et os as ceo Ss Deep earn Blockchain 2.0 + Interested by the Biteon evolution, mainstream companies ae trying to aoa ener Use th cera ocktin de and bd aleeve systems cunt or ictevee =) eat vse innduty, manufcung,suply chan, farce, goveranc, oT et Sonera es ae ‘This movement of academia, industry, startups is termed Blockchein 20,+ Blockchain is a powert technology ~ capable of goirg much futher than +The term was coined by Nick Szabo, a computer scientist and financial transactions ‘ryptographer in 1998 + Adecentaized platform ~ canbe utilized to avoid intemediates (the ‘msddleman). + Szabo daimed that smart contracts can be realized withthe help ofa public ledger + Smart Contracts: An automated computerized protozl used for digtally facitating, verifying or enforcing the negotiation or performance of a legal contrat By avicing intermediates and cacti vaidaing the contrac over @ decentralized platform faster, cheaper and more secure + Blockcain canbe poneering echnology to realze smart contracts Cure er a) ‘The Crowdfunding Platform KIc 2. You have an interesting + Both the product team end the supporters need to project, but donot have trust the crowafunding alatform satin nner ates the projet er + Te rode tam expe the mone be ge pid is =) 2] f based onthe project rates o ‘~ +The supporters expect he money to goto he project 44 The platform ensures 3. Multiple supporters ‘commit to support the projet with smal funds